Facebook announced its latest plan to make its Messenger app more attractive, this time with a little help from third-party app makers including two Canadian companies.
Keek Inc. and Bitstrips Inc., both from Toronto, were among the first 40 apps to launch in the new platform announced by chief executive Mark Zuckerberg during the company's F8 developers' conference in San Francisco on Wednesday. Now, instead of plain text, simple images and links, users will be able to easily install and share content from a variety of rich-media services that feature content such as GIFs, videos and sound.
"For developers, the platform provides a way to reach the [interconnected users] inside of messaging," Bitstrips founder and CEO Jacob Blackstock said. His company will launch its Bitmoji personalized cartoon app with Messenger. "There's huge opportunity for innovation and access to millions of potential new users around the world."
Keek, a Toronto social-media service with 74 million users built around sharing 36-second videos, could use the boost of getting first crack at Messenger's 600 million users. Although the company resides in the much-hyped social-media space, Keek has languished in relative obscurity while its peers ascended to tech stardom.
"They've had quite a lot of positive news flow, signing partnerships, bringing key people to the management team and the market has just yawned. There's been no reaction whatsoever," said Steve Palmer, chief investment officer at AlphaNorth Asset Management, which owns Keek shares.
Part of the investor indifference is a result of the fact that Keek trades on the TSX Venture Exchange, which is trading at close to record lows. Even most Canadian funds have turned their backs on the Venture and Keek's valuation has suffered as a result of the malaise in Canadian small caps, Mr. Palmer said.
Prior to Wednesday's announcement, Keek had a market capitalization of about $8.1-million (U.S.) – a paltry sum compared with the kind of money attracted by comparable U.S. companies.
Founded in 2011 by serial entrepreneur Isaac Raichyk, who left the company in 2013 after the startup hit a serious cash crunch, Keek was rescued through a reverse takeover by Canadian junior oil and gas firm Primary Petroleum in 2014. Earlier in March, Keek announced it had retained Cantor Fitzgerald Canada in an attempt to raise $15-million in a private-placement share offering.
Keek shares rose by almost 140 per cent on Wednesday, bringing the company's market value up to about $19-million.
"It's still not even close [to fair value]," Mr. Palmer said. "It's dramatically undervalued against similar companies in the space."
Earlier this month, Twitter Inc. paid almost $100-million for Periscope, which has a live-video streaming application in beta testing. More recently, another company Meerkat raised $12-million on a valuation of about $40-million for a streaming app with about 160,000 users.
But as much as Keek and others stand to benefit from partnering with Facebook, the social-media giant needs a richer app marketplace to compete in messaging markets dominated by China's WeChat or Japan's Line.
Mr. Zuckerberg's plea to app makers assembled in San Francisco was simple: "This is a really big opportunity and we can't do it alone."
As a reminder of Facebook's power to expand an app's reach, Mr. Zuckerberg said that Facebook drove 3.5 billion app installations in 2014 and has shared $8.5-billion in revenue with app makers over the years.